There is a museum in downtown Bogotá, Colombia's drizzly capital set high in the Andes, where a lawyer's pinstripe suit stands on display in a glass case – pristine, but for two bullet holes in the back. It belonged to Jorge Eliécer Gaitán, a liberal presidential candidate whose assassination in April 1948 sparked the Bogotázo, riots that set the city on fire. The riots ushered in 10 years of blood-letting between liberal and conservative sympathisers and, as peasants formed guerrilla movements, spawned the ensuing decades of South America's longest-running civil war.

For Juan Gabriel Vásquez, among the most inventive and erudite of Colombia's emerging generation of novelists, the assassination was the "defining episode of our history – our own JFK". Those gun shots were "our coming of age – when Colombia was welcomed into the cold war. And we still haven't got to the bottom of it; nobody knows who killed Gaitán."

Novelists leapt into the breach, "while the bodies were still falling" in the 1940s and 50s. But Colombia's most famous writer, Gabriel García Márquez – in the capital during the riots – dismissed them as a crude "inventory of dead people", crafted without art. "He complained writers hadn't taken the time to learn how to write novels," Vásquez says. "It's not enough to have the material; you have to have the narrative strategy, or you fail."

Vásquez, aged 37, has taken that lesson to heart. His talk bristles with quotations from writers he has ingested, rather as, in his words, the Nobel laureate from Aracataca "hired and fired" Faulkner and Hemingway. Good writers, Vásquez believes, "control their own influences – it's not involuntary". Hailing from an urban landscape of skyscrapers and mountain mist, he found the ruses that conjured the sweltering Caribbean plantations of Macondo were no use to him. He chose mentors in Joyce, Philip Roth, Saul Bellow. Joseph Conrad was key, particularly "his obsessive idea that novels go into dark places and come back with the news. It's not necessarily geographical," he says, "but shedding light on dark places of the soul."

The Informers (2004), published in a translation by Anne McLean in 2008, nods to Conrad's Under Western Eyes and The Secret Agent. A morally complex thriller set in the late 80s and 90s in Colombia, it looks back to the 40s and the second world war, when the government unjustly interned German nationals on the basis of murky blacklists and spying, during a period of zealous realignment with Washington. One character plagiarises Gaitán's speeches, while, for a Jewish refugee, the Bogotázo riots are a terrifying echo of Kristallnacht. Vásquez's interest is in exploring "dark corners of Colombian history that have made us what we are now."

The novel was published in 12 languages; Carlos Fuentes admired its charting of that "grey area of human actions and awareness where our capacity to make mistakes, betray and conceal, creates a chain reaction that condemns us to a world without satisfaction". Vásquez was named one of the Bogotá 39 – Latin America's top writers under 40 – when the city was Unesco world book capital in 2007. For Mario Vargas Llosa, his is "one of the most original new voices" of the region.

Vásquez's father's uncle was ambassador to London in the 50s, and his father's three-year stay as a teenager ("very important in his sentimental education") partly explains his son's "incurable Anglophilia". As a trilingual translator, Vásquez has rendered works by EM Forster and John Dos Pasos, as well as Victor Hugo, into Spanish. He lives in Barcelona with his wife, Mariana, a publishers' publicist, and their four-year-old twins, Martina and Carlota. Since the couple left Colombia for Europe 14 years ago, the country has become "my subject – my only obsession". But he could tackle it only after it struck him that the novel "can start from a point of not knowing; it can be an act of understanding, investigation, inquisition."

The Secret History of Costaguana (2007), published this month by Bloomsbury in McLean's translation, is a humorous, picaresque novel of adventure and a knowing take on a family saga. Set in 19th- and early 20th-century Colombia and London, it probes the political intrigue that mired the building of the Panama canal, complete with financial crash and US intervention. But it is posed as a bitter, playful riposte to Conrad's Nostromo; the British writer appears as a character. Conrad's fictitious province of Sulaco broke away from a South American republic named Costaguana, over a silver mine. As Conrad was writing the novel in London in 1903, Colombia's province of Panama seceded in a revolution spurred by machinations over the canal. "Two of my obsessions came together – a dark moment in Colombian history, and my literary god, who had written about my country, transforming and distorting it."

There is "no concrete proof that Conrad even set foot in Colombia", he says. Yet for Vásquez, author of a short biography of Conrad in Spanish, The Man from Nowhere, Nostromo is by far the "best book about Latin America written outside the Spanish language. Conrad realised the place wasn't to be narrated from a psychological realist point of view. It has an exaggerated quality." Vásquez's novel reflects his obsession with the writing of history. "History is a tale somebody has told us from a biased point of view; it's only one possibility among many." Novels "give another version, recover truths that have been repressed". The task is to "make Latin America's past come alive so we can gain some control over our future."

The novel was born in September 2005 at the same time as his daughters, who were premature, at six-and-a-half months. He would take his laptop to hospital and "write through the night, while my wife fed them, with all the instruments around". The experience coloured the book. "There's no way having children doesn't change your writing," Vásquez says. "You become more aware of language when you see it coming to life in a child."

Vásquez was born in 1973, and had a "wild, rural upbringing" on the northern outskirts of Bogotá. His father was a lawyer (as is his younger sister), who expected him to join his law firm, though "he couldn't complain – he'd force-fed me novels". During the World Cup in Spain when he was nine, and "football was my life", his father paid him to translate a biography of Pelé into Spanish: "It nourished my relationship with books and the English language." He went to Bogotá's Anglo-Colombian school, then did a law degree at Bogotá university, but was already set on a literary career.

It struck him recently that he grew up in tandem with the drug wars. "I was born as the drug business started – with American 'businessmen' who found Colombian cocaine could generate incredible revenues." Increasingly harsh US laws "built the drug business". His adolescence coincided with the most violent period of the 80s and early 90s, when rival cocaine cartels fought the state with terrorism. "Politicians were murdered; bombs went off in Bogotá all the time, aimed at district attorneys and the intelligentsia. You were afraid violence could touch you at any point. It was amazing how easily you get used to that – how normal a life you can lead." He left for Europe as the most overt urban violence was ending, after the Medellín cartel boss Pablo Escobar was killed in 1993."The relationship my country has with the drug trade has shaped my life," he says. "The consequences reach into every corner of society."

Convinced that the "only way out of Colombia's conflict is the legalisation of drugs", he says: "They're the main source of funding for leftwing guerrillas and rightwing paramilitaries. Both the military power of every illegal armed group, and the power of corruption, would disappear." Yet he holds out little hope. "There would have to be an international accord with the greatest consumer – the US – whose puritanical society will never allow it. Until it does, the producer countries will be drowned in these wars forever."

He left not only to escape a violent city, but to write, living in France and Belgium and, when he married in 1999, moving to Spain. Studying Latin American literature at the Sorbonne, he wrote two novels that he more or less disowns. In Paris he was mistakenly diagnosed with lymphatic cancer. "For a long moment – a few days – I thought I only had a short time to live." He had treatable TB, but the shock of the original diagnosis lives on. "A minor character in my novels always gets it."

Barcelona was the engine of the 60s boom, when books by Latin Americans were published in Spain and exported, making them accessible for the first time outside their own countries. Vásquez reveres the late Catalan publisher Carlos Barral as "the first to recognise what young Latin Americans were doing". Yet he tilts at an assumption that literary influence is territorial. The boom remade the literary landscape, he says, by bucking a "provincial view that it should be written within a Spanish tradition, as national, committed literature. García Márquez's generation felt free to look elsewhere. It was almost heresy, and incredibly liberating." But Vásquez has said that expectations abroad "castrated" later novelists. A generation "paid the price of not being cheap imitators; they didn't get the audience they deserved". His own, he feels, has greater freedom.

The untranslated short stories of Los Amantes de Todos Los Santos (2001) were set in France and the Belgian Ardennes. The Informers, his first fiction set in his homeland, was sparked by a conversation with a German-Jewish woman, a refugee to Colombia in 1938, whose father narrowly escaped internment as an enemy alien. It reveals how history penetrates private lives, and how the past devours the present. The novel presaged a national conversation about demobilisation during Colombia's peace process, and a controversial amnesty for paramilitaries. For Vásquez, it is about the "past as personal baggage we carry as individuals; and the tension between memory and voluntary forgetting; between thinking about the past and suppressing it to move on".

Costaguana identifies the origins of the split between liberals and conservatives in a 19th-century battle between anticlericals and obscurantists, at a time of a thriving free press and a democratic constitution. "If historical novels don't comment on the present, I don't see the point," Vásquez says. They can "remind us of roads not taken – how things could have been better. Colombia's 1863 constitution was admired by Victor Hugo. The forces of progress were strong. Why did that go wrong?" He personally views the Catholic church as "one of the most damaging institutions in Latin America a force of evil", alluding to inflammatory speeches by priests during the riots: "'Your church allows you to kill liberals because they're the devil incarnate' was said from pulpits." To this day, "it obstructs women's and homosexual rights, as well as a secular state and education."

Both novels reflect US power in Latin America. For Vásquez, that created a "personal conflict: my novels use everything I've learned from American literature to question a dark side of American politics". Yet he dislikes finger-pointing at "American imperialists". In Costaguana, liberal politicians conspire to grant the US control over the canal zone, when conservatives obstruct the treaty. "Nobody stole Panama from us – Panamanians felt central government wanted a bigger slice," he says. "Colombian politicians were as responsible as opportunistic Americans. The elite was myopic, self-centred and snobbish."

Since 2007 he has written a weekly column for the Colombian newspaper El Espectador, and finds political debate "addictive: a novel is about asking questions, but as a columnist you love certainty". He visits the country every year, partly wanting his daughters to "know where they come from, because I have no intention of going back to live. I like being a foreigner; I love the impunity, and looking at your place from a distance."

He had hoped for change in this month's presidential election, and is scathing about the outgoing two-term conservative Alvaro Uribe, whose "democratic security" crackdown is credited with making at least cities safer. So much so, that the country is being rebranded for tourism. "In the process, he's destroyed Colombian democracy," Vásquez says, despite the largely peaceful poll. "Civilians have been spied upon, or killed and passed off as dead guerrillas. The separation of church and state has almost been obliterated; congressional votes exchanged for political favours. The question is, was that price worth it?"

His hopes were dashed by last Sunday's runoff, when Uribe's former defence minister, Juan Manuel Santos, beat the Green candidate and former mayor of Bogotá, Antanas Mockus.Vasquez sees the election as really a referendum on defeating the Farc (Revolutionary Armed Forces of Colombia) guerrillas. Mockus "did an incredible job as mayor. When I left, Bogotá was a very violent, stressful city to live in. People had forgotten how to resolve conflicts peacefully; he taught them to live together again."

Those Colombian readers who congratulate Vásquez on avoiding the topic that most soils their image ("I smile and say, 'thank you'") may be in for a shock. His next novel will be a "private history of drugs". "Narco-realists" such as Fernando Vallejo, whose Our Lady of the Assassins depicted a teenage sicario – an assassin for a cartel – have tackled the trade head-on. But Vásquez wants a larger canvas, and to "rescue the narrative of the drug wars from cheap melodrama and simplistic Hollywood movies". His ambition will be to show "how the drug trade affects somebody not involved in it; somebody who – like me – has never seen a gramme of coke in his life."

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